Daily Market Lookup

• The U.S. dollar edged lower Friday, with risk sentiment boosted by the news that the U.S. and Russia were set to discuss the Ukraine crisis next week, raising hopes for a diplomatic solution. Russian Foreign Minister Sergei Lavrov agreed to meet U.S. Secretary of State Antony Blinken for talks in Europe next week, the State Department said Thursday night. The dollar, along with other safe-haven currencies the yen and the Swiss franc, have gained this week amid high tension on the Ukrainian border, with U.S. President Joe Biden warning on Thursday that the probability of an invasion of Ukraine is still “very high.” News that the two principal players are set to meet next week has been greeted with a degree of optimism, although the situation remains very tense, especially after both Ukrainian government forces and Moscow-backed rebels accused each other of breaking cease-fire rules on Thursday. Back in the U.S., the debate continues about how aggressive the Federal Reserve will have to be this year in terms of interest rate hikes to combat consumer inflation at levels not seen for 40 years. Cleveland Fed President Loretta Mester said late on Thursday the Fed would need to raise interest rates at a faster pace and shrink its balance sheet more quickly than it did after the "Great Recession", while St. Louis Fed President James Bullard said the Fed may need to raise rates above 2% to tame inflation. That said, the advocates for a 50 basis point Fed hike in March received a blow Thursday as initial jobless claims unexpectedly rose for the first time since mid-January, climbing by 23,000 to 248,000 in the week ended Feb. 12, the reference week for the February jobs report that’s due early next month. There are more Fed speakers due later Friday, including Chicago Fed President Charles Evans, FOMC member John Williams and Fed Vice Chair Lael Brainard, while economic data will be concentrated on the housing sector. This quick rebound will add to expectations that the Bank of England will continue to lift interest rates, having hiked at its last two meetings, as the year progresses.
• Gold was down on Friday morning in Asia. The yellow metal retreated after breaking above the key $1,900 level for a second consecutive session, with a Russia-U.S. meeting in the following week slowing investors’ dash towards safe-haven assets. U.S. stock futures bounced on Friday, while Asia Pacific shares were mostly down, as U.S.-Russia tensions over Ukraine continue to simmer. However, U.S. Secretary of State Antony Blinken agreed to meet with Russian foreign minister Sergey Lavrov, which raised hopes that a diplomatic solution to the tensions can be found. Russia is demanding security guarantees, including Ukraine never joining the North Atlantic Treaty Organization (NATO) and the U.S. and allies offering arms control and other confidence-building measures Gold rose as much as 1.8% on Thursday, climbing above the $1,900 mark for the first time since Jun. 11, 2021. Some investors expect a further rally should tensions continue to escalate, and vice versa, while benchmark 10-year U.S. Treasury yields also firmed. Spot gold, however, is set for a third consecutive weekly gain, up about 1.7% so far. "In the short term, bullion market inflows have clearly been buttressed by Russia/Ukraine geopolitics, higher equity market vols, and inflation hedge demand," Citi analysts said in a note. In other precious metals, silver was little changed at $23.80 per ounce and palladium fell 0.7%, with both set for small weekly gains. Platinum was up 0.3% and set for its best weekly showing since June 2021.
• Oil was down on Friday morning in Asia, retreating at the end of a very volatile week. However, the probability of extra supply from Iran returning to the market countered fears of a possible Russian invasion of Ukraine. Negotiations to revive Iran’s 2015 nuclear agreement continue to progress, with a draft accord outlining a sequence of steps that would eventually lead to granting waivers on oil sanctions taking shape. Although the deal would bring about 1 million barrels a day of oil back to the market, the timing remains unclear. However, other investors do not expect prices to fall much in the near term. This expectation comes as Iran could add supply to the global market and the Organization of the Petroleum Exporting Countries and allies (OPEC+) continually struggles to meet production targets. With air travel and road traffic picking up and increasing fuel demand, Brent futures could hold in the $90 to $100 a barrel range in the short term and top $100 "quite easily" if tensions escalate between Russia and Ukraine, according to CBA. U.S. President Joe Biden is set to host a call on the Ukraine crisis later in the day. Leaders from Canada, France, Germany, Italy, Poland, Romania, the U.K., the European Union, and the North Atlantic Treaty Organization (NATO), according to the office of Canadian Prime Minister Justin Trudeau.

Gold – XAU

Gold on Thursday made its intraday high of US$1901.07/oz and low of US$1867.71/oz. Gold up 1.540% at US$1898.26/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Buy in between 1890-1849 with risk below 1849, targeting 1900-1909-1916 and 1924-1934. Sell in between 1900-1949 keeping stop loss closing above 1949, targeting 1890-1879-1874 and 1865-1856-1849.

Silver - XAG

Silver on Thursday made its intraday high of US$23.90/oz and low of US$23.41/oz settled up by 0.868% at US$23.81/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 23.40-20.50, targeting 24.10 and 23.90-24.55-24.90 and 25.40-26.00 with stop loss should be place on the breakage below 20.50. Sell in between 23.90-25.90 with stop loss above 25.90; targeting 23.15-22.90 and 22.50-22.10-21.90.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US91.38/bbl, intraday low of US$88.71/bbl and settled up by 0.961% to close at US$89.86/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 90.40-94.50 with stop loss at 94.50; targeting 89.00-88.20-87.60 and 87.00-86.20-85.50. Buy above 91.00-90.40 with risk daily closing below 90.40 and targeting 91.90-92.50-93.00 and 93.90-94.50.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.1385/EUR, high of US$1.1385/EUR and settled the day down by 0.110% to close at US$1.1358/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.347), which become immediate support, break below will target 1.1270. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1355-1.1220 with risk below 1.1220, targeting 1.1485-1.1525-1.1570 and 1.1620-1.1650. Sell below 1.1400-1.1570, targeting 1.1350-1.1270-1.1230 and 1.1200-1.1185 with stop-loss at daily closing above 1.1650.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.3545/GBP, high of US$1.3637/GBP and settled the day by 0.237% to close at US$1.3614/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3760) is become immediate support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.3600-1.3350 with target 1.3640-1.3700 and 1.3750-1.3800-1.3840 with stop loss closing below 1.3300. Sell in between 1.3640-1.3840 with targets at 1.3500-1.3440-1.3390 and 1.3300-1.3250 with stop loss should be 1.3790.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY114.83/USD and made an intraday high of JPY115.53/USD and settled the day down 0.441% at JPY114.92/USD.

Technicals in Focus:

USD/JPY on Thursday made intra‐day low of JPY114.83/USD and made an intraday high of JPY115.53/USD and settled the day down 0.441% at JPY114.92/USD.

Trading Strategy: Neutral to Sell

Sell below 115.90-118.00 with risk above 118.00 targeting 115.40-115.00-114.50 and 113.90-113.20-112.70. Long positions above 115.00-113.70 with targets of 115.50-116.35-116.90 with stop below 113.70.